Jul 062021
 
 July 6, 2021  Posted by at 8:53 am Finance Tagged with: , , , , , , , , ,  85 Responses »


Edourd Manet A Bar at the Folies-Bergère 1882

 

Israel Sees Plunge In Pfizer Vaccine Efficacy Rate Due To Delta Variant (BBG)
Lambda Covid-19 Variant From Peru May Be Resistant To Vaccines (NYP)
9 Reasons Not to Support, Mandate Investigational COVID19 Vaccines (McCullough)
The Chicken-and-Egg Problem (Which Came First?) (VanDen Bossche)
How the Moderna Covid-19 mRNA Vaccine Was Made So Quickly (CNBC)
Can Immune Responses Alone Reveal Which Covid-19 Vaccines Work Best? (Smag)
T Cells: Why Immunity Is About More Than Antibodies (CEBM)
Refusing To Be Vaccinated Against Covid A ’Sin’ – Russian Orthodox Church (RT)
Relaxing Of Covid Restrictions In England Sparks Social Media Meltdown (Clark)
HIV Vaccine Trial Launched At Oxford In Bid To End ‘40-Year Wait’ (RT)
The Dollar’s Declining Status as Dominant “Global Reserve Currency” (WS)
The Ice-Cream Flavor Next Time (Kunstler)

 

 

 

 

Suramin

 

 

VanDen Bossche?

Israel Sees Plunge In Pfizer Vaccine Efficacy Rate Due To Delta Variant (BBG)

Israel has recorded a steep drop in the efficacy rate of the Pfizer-BioNTech vaccine in preventing coronavirus infections, due to the spread of the Delta variant and the easing of government restrictions, Ynet news website reported, citing Health Ministry data. At the same time, the decline in protection against serious cases and hospitalisation is considerably milder, the website said. The figures show that between May 2 and June 5, the vaccine had a 94.3 per cent efficacy rate. From June 6, five days after the government cancelled coronavirus restrictions, until early July, the rate plunged to 64 per cent. A similar decline was recorded in protection against coronavirus symptoms, the report said. At the same time, protection against hospitalisation and serious illness remained strong.


From May 2 to June 5, the efficacy rate in preventing hospitalisation was 98.2 per cent, compared with 93 per cent from June 6 to July 3. A similar decline in the rate was recorded for the vaccine’s efficiency in preventing serious illness among people who had been inoculated. These figures are in line with ministry data that show many of the new cases are among people who have been vaccinated, while the number of serious cases is rising much more slowly, Ynet said. Last Friday, 55 per cent of the newly infected had been vaccinated, the website said. As at July 4, there were 35 serious cases of coronavirus in Israel, compared with 21 on June 19. [..] Israel had one of the world’s most effective coronavirus inoculation drives. Some 57 per cent of the general population is fully vaccinated, including 88 per cent of the population above the age of 50 – the group considered most at risk for serious cases.

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The more vaccinations, the higher the chance for more variants. The official narrative has this completely upside down, but it will take a lot for them to declare defeat. Booster shots sounds a lot better to them.

Lambda Covid-19 Variant From Peru May Be Resistant To Vaccines (NYP)

Scientists fear that a highly contagious new COVID-19 variant that is ravaging Peru may be resistant to vaccines. The Lambda mutation, or C.37, appears to have emerged in Peru last August — and is now being blamed for the country having the highest pandemic death rate in the world. The concerning strain has since spread to around 30 countries, mostly in Latin America — but also as far as the UK, which has recorded at least eight cases, according to government figures. There are no known cases of the Lambda strain in the US, according to the Centers for Disease Control and Prevention. In Peru, Lambda has accounted for 81 percent of new infections tested for variants since April, according to the World Health Organization.

The South American nation currently has by far the highest mortality rate in the world, according to Johns Hopkins University data. There, nearly 10 percent of those recorded as being infected end up dying — with the death rate of nearly 600 for every 100,000 citizens almost double that of the next nation, Hungary, the data shows. The US is 21st with just under 185 deaths per 100,000. Lambda was last month declared a Variant of Interest by the World Health Organization (WHO), which noted that it was “associated with substantive rates of community transmission in multiple countries.” “Lambda carries a number of mutations” that may have led to “potential increased transmissibility or possible increased resistance to neutralizing antibodies,” the WHO said.

Scientists in Chile — where Lambda is blamed for more than a third of the country’s infections — also warned in a recent study, published in a preprint last week, that it appears to evade vaccines better than other strains. “Our data show for the first time that mutations present in the spike protein of the Lambda variant confer escape to neutralizing antibodies and increased infectivity,” wrote the researchers from the University of Chile in Santiago. That could explain why it has been able to take hold despite Chile “undergoing a massive vaccination program,” the study warned.

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McCullough is clear and concise. Wonder how long LinkedIn will keep this up.

9 Reasons Not to Support, Mandate Investigational COVID19 Vaccines (McCullough)

1. COVID-19 vaccination is voluntary research. The COVID-19 public vaccination program operated by the CDC and the FDA is a clinical investigation and under no circumstance can any person receive pressure, coercion, or threat of reprisal on their free choice of participation. Violation of this principle of autonomy by any entity constitutes reckless endangerment with a reasonable expectation of causing personal injury resulting in damages.


2. COVID-19 vaccines do not work well enough. The current COVID-19 vaccines are not sufficiently protective against contracting COVID-19 to support its use beyond the current voluntary participation in the CDC sponsored program. A total of 10,262 SARS-CoV-2 vaccine breakthrough infections had been reported from 46 U.S. states and territories as of April 30, 2021. Among these cases, 6,446 (63%) occurred in females, and the median patient age was 58 years (interquartile range = 40–74 years). [..]

3. COVID-19 vaccines have a dangerous mechanism of action. The Pfizer, Moderna, and JNJ vaccines are considered “genetic vaccines” or vaccines produced from gene therapy molecular platforms.[i] [ii] They have a injurious mechanism of action in that they all cause the body to make an uncontrolled quantity of the pathogenic spike protein from the SARS-CoV-2 virus. This is unlike all other vaccines where there is a set amount of antigen or live-attenuated virus. This means for the Pfizer, Moderna, and JNJ vaccines it is not predictable among patients who will produce more or less of the spike protein. The spike protein itself has been demonstrated to injure vital organs such as the brain, heart, lungs, as well as damage blood vessels and directly cause blood clots. Additionally, because these vaccines infect cells within these organs, the generation of spike protein within heart and brain cells in particular, causes the body’s own immune system to attack these organs. [..]


7. People are dying and being hospitalized in record numbers in the days after COVID-19 vaccination. Based on VAERS as of June 25, 2021, there were 6,985 COVID-19 vaccine deaths reported and over 23,257 hospitalizations reported for the COVID-19 vaccines (Pfizer, Moderna, JNJ). By comparison, from 1999, until December 31, 2019, VAERS received 3167 death reports (158 per year) adult death reports for all vaccines combined. Thus, the COVID-19 mass vaccination is associated with at least 39-fold increase annualized vaccine deaths reported to VAERS. COVID-19 vaccine adverse events account for 98% of all vaccine-related AEs from Dec 2020 through present in VAERS.

Bell’s palsy

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VanDen Bossche reacts to the CNN article I cited on July 4, Unvaccinated People Are “Variant Factories” – Infectious Diseases Expert.

“..not the non-vaccinated individuals but the vaccinees are now responsible for driving Sars-CoV-2 evolutionary dynamics..”

The Chicken-and-Egg Problem (Which Came First?) (VanDen Bossche)

As already mentioned on multiple occasions, molecular epidemiologists have shown that population-level S protein-directed immune pressure is now driving the propagation of variants that are increasingly evolving mutations enabling resistance to S-specific antibodies (as now massively induced by the ongoing vaccination campaigns). As more infectious variants bind to the cellular Ace-2 receptor with enhanced binding strength, the Ace-2 receptor more readily outcompetes S-specific antibodies for binding to these variants. Consequently, these variants gain a competitive advantage when replicating in individuals who exert strong S-directed immune pressure on the virus (i.e., in vaccinees!), especially upon incorporating additional mutations (within the RBD) that prevent direct binding of S-specific vaccinal antibodies.

Variants that are increasingly resistant to S-specific antibodies (e.g., delta and delta plus variant) can only adapt to the population provided the S-directed immune pressure is widespread in the population. This is, of course, the case if larger parts of the population get vaccinated and when vaccinees can easily transmit the variant due to relaxation of infection prevention measures. In principle, non-vaccinated individuals who are in good physical and mental health can deal with all variants, provided the infectious viral pressure does not exceed a certain threshold. This is because their innate antibodies have relatively lower affinity for the virus.

However, breeding of more infectious and more anti-S antibody-resistant variants in vaccinees will inevitably enhance viral replication and transmissibility in vaccinees, thereby raising the infectious pressure and increasing the likelihood for non-vaccinated subjects to become re-infected while their natural/ innate antibodies (Abs) are being suppressed by short-lived S-specific Abs (elicited as a result from previous asymptomatic infection). So, ‘yes’, some non-vaccinated people will become susceptible to the disease and then contribute to further propagation of these variants. It’s important to note, however, that this is a result and not the source of the enhanced evolution of the virus.

So, not the non-vaccinated individuals but the vaccinees are now responsible for driving Sars-CoV-2 evolutionary dynamics. It’s also important to note that non-vaccinated people will not contribute to natural selection as they will either eliminate the virus (thanks to their innate antibodies in synergy with natural killer cells) or become susceptible to Covid-19 disease due to suppression of their innate immune defense. Short-term shedding of low concentrations of viral variants by asymptomatically infected, non-vaccinated people is a direct consequence of shifting natural immune selection forces that are increasingly coming into play as a result of mass vaccination. This will ultimately put the vaccinees in much worse shape than the non-vaccinated as the latter will still be able to rely on their innate Abs.

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For 10 years, Moderna could get no approval for anything. Then it got one in weeks. Pfizer may have played a key role in that.

How the Moderna Covid-19 mRNA Vaccine Was Made So Quickly (CNBC)

Almost all people hospitalized for Covid-19 are not vaccinated — 99.9% as of May to be exact, according to a recent Associated Press report. Yet 13% of U.S. adults said they will “definitely not” get a COVID-19 vaccine as recently as late May, according to Kaiser Family Foundation COVID-19 Vaccine Monitor. Another 12% wanted to “wait until it has been available for a while to see how it is working for other people.” Vaccinating the majority of the population is the best way to help avoid further surges from constantly evolving variants, like the current delta variant, which is quickly spreading in the U.S. and other countries. Still, Moderna co-founder Noubar Afeyan understands the hesitation to get a new vaccine.

“The vaccines came out in such a [short] timeframe that people assumed automatically, it can’t possibly be safe,” Afeyan said during a talk at Massachusetts Institute of Technology in May. “In fact, many, many people were on television espousing the view that — experts for that matter — that if it’s done in less than five years, it’s got to be unsafe, all of which is untrue. “Nevertheless, people get confused.” What people might not understand is that extensive research was being done on mRNA technology and other mRNA vaccines for years. That decade plus of experience and the innovation of mRNA technology itself is what allowed Moderna to produce its Covid mRNA vaccine so quickly as the pandemic struck. And it could also change the future of medicine.

Here’s what you need to know about how the Moderna Covid-19 mRNA vaccine was developed. It is true that Moderna’s mRNA vaccine was ready remarkably fast, as was Pfizer’s. Chinese scientists put the genetic sequence of the novel coronavirus online on Jan. 11. Over the next two days, the NIH and Moderna used it to plot out a vaccine. Afeyan remembers getting a key call about the development of the Covid-19 vaccine. “January 21st, my daughter’s birthday…. I got a call from Davos [during The World Economic Forum] from the CEO of Moderna,” he says. Bancel had been approached by a number of public health groups at the conference “urging” him to work on a vaccine. “We literally Decided overnight…to try and do this,” Afeyan said at MIT.

Moderna delivered the first doses of its Covid-19 vaccine to the NIH for testing on Feb. 24, 2020, and “the first Moderna shot went into a volunteer’s arm in Seattle on March 16, 2020,” according to Afeyan. After testing the Moderna vaccine on 30,000 volunteers, on Dec. 18, 2020, the FDA authorized it for emergency public use, and three days after that, the first Moderna vaccines were administered to front-line health workers, according to Afeyan. One of the reasons Moderna’s mRNA Covid vaccine development moved so quickly is because scientists had been working with mRNA for years. [..] And Moderna has been working with mRNA technology “since its inception in 2010 for myriad therapeutic areas,” including cancer therapies, Afeyan tells CNBC Make It (by way of a publicist), and with clinical development of mRNA-based antiviral vaccines since 2015.

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Science Mag sees testing protocols primarily as a nuisance because proven vaccines are now available. Proven before they were tested, that is. With a vague bit about T cells thrown in.

Can Immune Responses Alone Reveal Which Covid-19 Vaccines Work Best? (Smag)

Other than running a placebo-controlled, clinical trial lasting many months and involving tens of thousands of people, is there any way to be sure a COVID-19 vaccine will work? Many researchers contend that the success of several vaccines now widely in use offers a shortcut: Simply gauge a vaccine’s ability to elicit so-called neutralizing antibodies, which bind to the virus and prevent it from entering cells. But several recent studies, the latest published as a preprint on 24 June, point to other “correlates of protection”: “binding” antibodies—which latch on to the virus but don’t block entry—and another set of immune warriors called T cells.

Vaccine decisions may soon depend on a better understanding of these supporting actors. Several companies are developing updates of their COVID-19 vaccines tailored to protect against new viral variants, and they hope regulatory agencies won’t require that they show efficacy in big clinical trials, which are not only time-consuming and expensive, but also increasingly ethically fraught because some of the participants receive a placebo even though proven vaccines are now available. With an established correlate of protection, trials can give an updated vaccine to a much smaller group of participants and then check whether they produce the telltale immune responses. (That’s how the annual updates of flu vaccines are approved.) Health officials may also turn to correlates when they consider prioritizing existing COVID-19 vaccines, authorizing new “mix and match” combinations, or even when making decisions about entirely new vaccines.

But finding robust correlates has been challenging. During the megatrials that led to the authorization of COVID-19 vaccines, investigators monitored antibody responses and tried to correlate them with their odds of participants getting sick. Different trials, however, used different antibody assays and different definitions of mild COVID-19, the main endpoint in the trials. “It’s anarchy because it’s always been anarchy,” says John Moore, an immunologist at Weill Cornell Medicine. “You’re dealing with different academic labs and different companies, and companies tend not to talk to each other.” Many trials also lacked the statistical power to measure protection from hospitalization and death, arguably a COVID-19 vaccine’s most important task. And few trials even looked carefully at T cells, which are far more cumbersome to measure.

[..] Penny Moore and colleagues also found support for a role for T cells. In an 11 June preprint, they reported that 96% of participants in an efficacy trial of the COVID-19 vaccine produced by Johnson & Johnson (J&J) made antibodies that neutralized a viral strain from early in the pandemic but only 19% had antibodies that neutralized the Beta variant, which is widespread in South Africa and infamous for dodging neuts. Yet despite the variant, the vaccine remained protective against moderate and severe COVID-19. “I think it’s entirely plausible … that T cells are doing something really useful here,” Penny Moore says.

And you thought spike proteins were bad…
https://twitter.com/i/status/1412287378568384515

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I was reading this yesterday (twice), how the immune system fights off Covid.

T Cells: Why Immunity Is About More Than Antibodies (CEBM)

The CD4+ T cell response in COVID-19 Some studies have shown that in patients with severe COVID-19 there is evidence of impaired function of CD4+ T cells, including reduced IFN ɣ production [16], while others seem to suggest over-activation of these T cells [17]. Overall, the CD4+ T cell response in acute SARS-CoV-2 infection, whether impaired, over-activated, or inappropriate, and how this relates to disease outcomes, remains to be elucidated and is an important question. A particularly high frequency of CD4+ T cell responses specific to virus spike protein has been observed in patients who have recovered from COVID-19, which is similar to what has been reported for influenza virus infections [11]. In one small study of 14 patients, circulating virus-specific CD4+ T cells were identified in all of those who recovered from SARS- CoV-2, which also suggests the potential for developing T cell memory [18] and perhaps longer-term immunity.

The CD8+ T cell response in COVID-19 There appears to be heterogeneity in the immune response between patients. Some studies have reported that CD8+ T cells from patients with severe COVID-19 had reduced cytokine production following in vitro stimulation, and some have shown evidence of possibly exhausted T cells; in contrast, other studies have reported an overaggressive CD8+ T cell response or highly activated CD8+ T cells with increased cytotoxic response in patients with COVID-19 [14]. It is still unclear how the heterogeneity of the CD8+ T cell response relates to disease features, which could be driven by, for example, patient immunotypes [17,19] or the nature of the interaction between respiratory epithelial cells and cytotoxic T cells and the level of response.

Several chemokine receptor genes (including CCR9, CXCR6, and XCR1) and the locus controlling the ABO blood type have been identified as being associated with severe disease; however, whether these genes are directly or indirectly related to T cell responses in COVID-19 remains unknown [14]. A higher proportion of CD8+ T cell responses was observed in patients who only developed mild disease, suggesting a potential protective role of CD8+ T cell responses [11]. Most of the CD8+ T cell responses were specific to viral internal proteins, rather than spike proteins, which should be considered in vaccine development [4]. SARS-CoV-2-specific CD8+ T cells are present in about 70% of patients who have recovered [18], which is evidence of a virus-specific CD8+ T cell response and the presence of CD8+ T cell memory. However, the ability of these cells to protect from future infection remains to be determined.


Role of T cells in response to COVID-19 infection: adapted from The trinity of COVID-19: immunity, inflammation and intervention. Nat Rev Immunol. 2020 Jun;20(6):363-374. doi: 10.1038/s41577-020-0311-8.

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How clear is the bible on this?

Refusing To Be Vaccinated Against Covid A ’Sin’ – Russian Orthodox Church (RT)

Those who refuse to be vaccinated against Covid-19 are committing a sin they will have to repent for the rest of their lives. That’s according to the Russian Orthodox Church, whose spokesman said rejecting a jab is selfish. Speaking to TV channel Russia 24, the head of the Russia Orthodox Church’s Department for External Church Relations, Metropolitan Hilarion, explained that his parishioners regularly repent to him for not being vaccinated. They feel guilty because they passed the virus on to someone else who eventually died, he claimed. “They come and say, ‘How am I supposed to live with this now?’ And it’s hard for even me to say how to live with it,” he explained. “All your life, you have to make up for the sin you committed.”


The sin is thinking about yourself instead of thinking about other people,” the metropolitan said. “We are responsible – each of us – not only for ourselves and not only for our loved ones, but also for all those who come into contact with us.” In recent months, the Church has been more vocal about its support for the government’s vaccination program. Metropolitan Hilarion has regularly spoken on TV about the need to follow the rules and take precautions to avoid infection. In June, the cleric revealed his “positive attitude” towards the government initiative to impose compulsory vaccination on those working in the service sector. “Of course, it is desirable to observe the principle of voluntariness in relation to vaccinations – the principle that was stated from the very beginning,” he explained. “But there is also the principle of people’s responsibility for the lives of other people.”

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Seen this a lot in the UK: people who say it’s criminal to expose kids to Covid, and therefore they should be injected. How do you get the world so wrong side up?

Relaxing Of Covid Restrictions In England Sparks Social Media Meltdown (Clark)

Boris Johnson has announced that masks and social distancing are likely to end on July 19, which has, predictably, been met with a hysterical, irrational response by those who don’t seem to want life ever to return to normal. Talk about being triggered. Boris Johnson’s press conference on Monday sent #wearamask Twitter into a hyperbolic meltdown of epic proportions. The PM announced that the public would have independence from burdensome domestic Covid restrictions- which were supposed to have lasted for only three weeks but instead have lasted for sixteen months- on 19 July 19, with confirmation of this coming on July 12. The relaxing of restrictions had been foreshadowed in an article in the Mail on Sunday by the new UK Health Secretary Sajid Javid, in which he said Britain would need to learn to live with Covid.

While we should all remain cynical about what the government may have planned for the autumn, Javid declared –rightly, in my view– that opening the country up would actually make us healthier, physically and mentally. Cue the most incredible Twitter meltdown ever seen. What the government was proposing was ‘genocide.’ “Why are the British people accepting this? We need to close borders, effective test and trace, social distancing (through bi-weekly remote and in person education) in schools, masks indoors, work from home and vacs until infections are really low. Then re-cover (sic), slowly” opined one Tweeter ironically with the moniker ‘Freedom.’ Citing Orwell (again, who said satire was dead?), the Observer’s Carole Cadwalladr tweeted “War is peace. Freedom is slavery. Health is the deliberate mass infection of an entire nation’s children with a novel & mutating virus with unknown long-term consequences.”

The hashtag #WearAMask was trending with a whole succession of self-righteous virtue signallers telling the world that they would continue to mask up after July 19, whatever the government announced. Repeat after Me: People who wear masks are Good People, People who don’t are Bad People (and probably supporters of Brexit and Donald Trump). “The thing about mask wearing is it protects others more than you” declared Liberal Democrat MP Layla Moran, who piously informed us she’d continue to wear a mask indoors after July 19. As if we had to know. The Liberal Democrat-supporting author Emma Kennedy tweeted: “In a nutshell, post July 29 there will be people prepared to wear masks because they care about other people. And those who don’t. And that’s it, isn’t it.”

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If it doesn’t have any mRNA, we’re not interested.

HIV Vaccine Trial Launched At Oxford In Bid To End ‘40-Year Wait’ (RT)

Researchers at the UK’s University of Oxford have administered the first doses of a potential HIV vaccine to participants, as part of a Phase-One clinical trial launched on Monday. The trial, called HIV-CORE 0052, aims to evaluate the safety, tolerability, and immunogenicity of the HIVconsvX vaccine, the University said. The project is part of the European Aids Vaccine Initiative, funded by the European Commission. The jab is known as a “mosaic,” meaning it can target a broad range of HIV-1 variants and potentially become a suitable vaccine for use around the world. Scientists will give two doses of the vaccine four weeks apart to 13 healthy, HIV-negative adults, aged between 18 and 65, who are not considered at risk of infection. “An effective HIV vaccine has been elusive for 40 years,” Tomas Hanke, the trial’s lead researcher and Professor of Vaccine Immunology at the University of Oxford’s Jenner Institute, said in a statement.


“This trial is the first in a series of evaluations of this novel vaccine strategy in both HIV-negative individuals for prevention and in people living with HIV for cure.” The Oxford solution works by stimulating the body’s immune response via T cells which kill specific pathogens, unlike most other HIV vaccine candidates, which induce antibodies created by B-cells to fight the virus. HIV attacks the body’s immune system and can develop into life-threatening AIDS if left untreated. In 2014 the UN announced a ‘fast-track’ target of decreasing the number of people newly-infected with the virus to 500,000 by 2020. However, last year there were approximately 1.5 million new cases. The Oxford team expects to report its results by April next year. There are also plans to start similar trials in Europe, Africa and the US.

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Always amusing. But mostly led by what people wish for, not what is reality.

The Dollar’s Declining Status as Dominant “Global Reserve Currency” (WS)

Yes, the Fed is a drunken reckless money-printer, and the US government has been high for years on deficit spending, but other major central banks and governments do the same or worse. The long-term trends are clear, however. The global share of US-dollar-denominated exchange reserves ticked up to 59.5% in the first quarter of 2021, after having dropped to a 25-year low in Q4 2020, according to the IMF’s Composition of Official Foreign Exchange Reserves (COFER) data released at the end of June. Dollar-denominated foreign exchange reserves are Treasury securities, US corporate bonds, US mortgage-backed securities, US Commercial Mortgage Backed Securities, and other dollar-denominated financial assets held by foreign central banks. Q1 was a ripple in the long-term trajectory.

Since 2014, the dollar’s share has dropped 6.5 percentage points, from 66% to 59.5%, on average 1 percentage point per year. At this rate, the dollar’s share would fall below 50% over the next decade. Since 1999, when the euro arrived, the dollar’s share of foreign exchange reserves has dropped 11.5 percentage points, from 71% to 59.5% (year-end shares, except Q1 2021):

Exchange rates between the dollar and other currencies change the valuations expressed in dollars of non-dollar reserves, such as German government bonds. Yes, but… The Dollar Index (DXY) moved substantially since 1999, up and down, but it is now roughly back where it was in 1999. This means that nearly all of the decline in the share of the dollar as foreign exchange reserves since 1999 was due to central banks unloading dollar-denominated assets, and not due to exchange rates.

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“..decoding the foreign policy moves signified in “Joe Biden’s” ice-cream flavor choices. (Rocky Road means: Oh, let China have that….)”

The Ice-Cream Flavor Next Time (Kunstler)

A nation mesmerized by its own weakness wanly celebrated the long-ago and faraway memory of standing up for itself, while it passively endures the current orgy of tyrannical cancellation and suppression of anyone talking back to the present folks-in-charge. Over just a few years, this tyranny has grown like a toxic slime mold from such an unlikely place, the Internet social app ecology of Facebook, Twitter, and Google, as they took over the public arena — where the battle of ideas is supposed to live — and did the government’s dirty work, complete with adorable emojis. You’re fired! Who will stand up to Zuck, Jack, and Sundar Pichai? Who elected these megalomaniacs boss of the USA? What will it take to end their reign of terror? Some sort of… revolution? (Shhhh! That must be a dirty word, even considering we just celebrated the high point of the American Revolution: The Declaration of Independence, signed July 4, 1776.)

Don’t look to “Joe Biden,” the nation’s putatively elected leader — about whose election back in November, 2020, you are liable to hear more about as the summer stickily unspools. Zuck, Jack, and Sundar managed to protect “Joe Biden” from the stupendous depredations of his offspring, Hunter Biden, recorded in explosive detail on a laptop the public was not allowed to hear about. Don’t look to the Department of Justice, supposedly “investigating” that horde of memos and emails detailing the Bidens ’influence-peddling to the CCP and others — they’re busy surveilling “white supremacists” on the apps run by Zuck, Jack, and Sundar. And for sure don’t look to the news media, that coalition of sell-outs and quislings, busy decoding the foreign policy moves signified in “Joe Biden’s” ice-cream flavor choices. (Rocky Road means: Oh, let China have that….)

Wondering who is actually running the “Joe Biden” government? Some of us out here are. (Do you think we’re allowed to say that?) For instance, have you tried googling the name Susan Rice lately? Remember her? Maybe not. “Joe Biden” appointed her Director of the White House Domestic Policy Council. From the looks of things across the country, you’d think her plate would be heaped mighty high, what with “insurrection” and other white mischief threatening to take down the republic. Anyway, I googled “news” for her. Hardly a goshdarn thing came up that wasn’t from months ago, and most of that was sheer puffery about how accomplished she is, and what a fabulous person. Don’t you wonder what her phone log looks like? All those calls to the Obama residence, day after day, hour after hour?

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Dec 042014
 
 December 4, 2014  Posted by at 11:11 am Finance Tagged with: , , , , , , ,  Comments Off on Debt Rattle December 4 2014


Arthur Rothstein Migratory fruit pickers’ camp in Yakima, Washington Jul 1936

Five Reasons Why Markets Are Heading For A Crash (Telegraph)
‘The Minsky Moment Is The Crash’ (Zero Hedge)
Global Company Bond Sales Nearing $4 Trillion Set Annual Record (Bloomberg)
Collapse Of Oil Prices Leads World Economy Into Trouble (Guardian)
Sub-$50 Oil Surfaces in North Dakota As Regional Discounts Swell (Bloomberg)
First U.S. Gas Station Drops Below $2 a Gallon (Bloomberg)
There Are 550,000 Iraqi Barrels Signaling Oil Glut Will Deepen (Bloomberg)
Crushing The “Lower Gas Price = More Spending” Fiction (Zero Hedge)
Energy Junk-Debt Deals Postponed as Falling Oil Saps Demand (Bloomberg)
Canada Gas Project Delay Highlights Oil Plunge’s Wider Risk (Bloomberg)
Norway Seeks to Temper Its Oil Addiction After OPEC Price Shock (Bloomberg)
China Shadow Bank Collapse Exposes Grey-Market Lending Risk (FT)
BlackRock China ETF’s Derivatives Strategy Faltering (Bloomberg)
What The Dollar May Be Saying About Europe (CNBC)
UK Moves To Cut Spending To 1930s Levels (Guardian)
Australia’s Dreadful GDP Figures – Six Things You Need To Know (Guardian)
Putin Accuses West Of ‘Pure Cynicism’ Over Ukraine (CNBC)
One Million Europeans Sign Petition Against EU-US TTIP Talks (BBC)
Xi’s Cultural Revolution Is Doomed to Fail (Bloomberg)
The 8th, And Final, Deadly Sin: Exploiting The Earth (Paul B. Farrell)

“The first reason to worry is the curiously juxtaposed state of asset prices, with generally buoyant equities but falling sovereign bond yields and commodity prices. They cannot both be right. High equity prices are – or at least, should be – indicative of investor confidence and optimism. Low bond yields and falling commodity prices point to the very reverse.”

Five Reasons Why Markets Are Heading For A Crash (Telegraph)

Many stock markets are close to their all-time highs, the oil price is plummeting, delivering a significant boost to Western and Asian economies, the European Central Bank is getting ready for full-scale sovereign QE – or so everyone seems to believe – the American recovery is gaining momentum, Britain is experiencing the highest rate of growth in the G7, God is in his heaven and all’s right with the world. All good, then? No, not good at all. I don’t want to put a dampener on the festive cheer, but here are five reasons to think things are not quite the unadulterated picture of harmony and advancement many stock market pundits would have you believe.

The first reason to worry is the curiously juxtaposed state of asset prices, with generally buoyant equities but falling sovereign bond yields and commodity prices. They cannot both be right. High equity prices are – or at least, should be – indicative of investor confidence and optimism. Low bond yields and falling commodity prices point to the very reverse; they are basically a sign of emerging deflationary pressures and a slowing economy. If demand was really about to roar away, both would be rising along with equities, not falling. The markets have become a kind of push-me-pull-you construct. They look both ways at the same time.

Yet this is no mere anomaly. There is a good reason for these divergent asset prices – pumped up by central bank money printing, abundant cash is desperate for fast vanishing yield, and is chasing it accordingly. Spanish sovereign debt might have looked a good buy a couple of years back, when the yield still factored in the possibility of default. But today, the yield on 10-year Spanish bonds is less than 2pc. In Germany, it’s just 0.7pc, not much more than Japan, which has had 20 years of stagnation and deflation to warp the traditional laws of investment. If it is yield you are after, sovereign debt markets are again exceptionally poor value, barely offering a real rate of return at all. Commodities were the next port of call, but that game too seems to be up.

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“We all are in a Ponzi world right now. Hoping to be bailed out by the next person.”

‘The Minsky Moment Is The Crash’ (Zero Hedge)

BCG senior partner Daniel Stetler was recently interviewed by Portugal’s Janela na web magazine, his insights are significant and worrisome… Some key excerpts: “You have to think about a huge tower of debt on shaky foundations where central banks pump concrete in the foundations in an emergency effort to avoid the building from collapsing and at the same time builders are adding additional floors on top” [..] “Today central banks give money to institutions, which are not solvent, against doubtful collateral for zero interest. This is not capitalism.” [..] “It is the explicit goal of central banks to avoid the tower of debt to crash. Therefore they do everything to make money cheap and allow more speculation and even higher asset values. It is consistent with their thinking of the past 30 years. Unfortunately the debt levels are too high now and their instruments do not work anymore as good. They might bring up financial assets but they cannot revive the real economy.” [..]

“In my view [Piketty] overlook the fact that only growing debt levels make it possible to have such a growth in measured wealth. Summing up, Piketty looks at symptoms – wealth – and not on causes – debt.” “We need to limit credit growth and make it tax-attractive to invest in the real economy not in financial speculation. This will happen automatically if we return to normal interest rates. The key point is, that we as societies should reduce consumption which includes social welfare and rather invest more in the future.” [..] “”We all are in a Ponzi world right now. Hoping to be bailed out by the next person. The problem is that demographics alone have to tell us, that there are fewer people entering the scheme then leaving. More people get out than in. Which means, by definition, that the scheme is at an end. The Minsky moment is the crash. Like all crashes it is easier to explain it afterwards than to time it before. But I think it is obvious that the endgame is near.”

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How ultra-low rates lets companies pretend they’re actually economically viable.

Global Company Bond Sales Nearing $4 Trillion Set Annual Record (Bloomberg)

Global corporate bond sales set an annual record as companies lock in borrowing costs that forecasters say are bound to rise. SoftBank, Amazon.com and Medtronic were among borrowers that helped push issuance to $3.975 trillion, past the previous peak of $3.973 trillion in 2012, according to data compiled by Bloomberg. Sales in the U.S. have already reached an unprecedented $1.5 trillion. Issuance defied predictions of a slowdown made by underwriters from Bank of America Corp. to Barclays Plc as a decline in benchmark costs that no one foresaw pushed yields to record lows. While central banks in Europe and Japan have stepped up their own stimulus efforts, the likelihood the Federal Reserve will boost interest rates has fueled company borrowings worldwide.

“We’ve seen so much issuance just because everybody’s thinking that next year’s going to be the year when rates start rising,” Nathan Barnard, a fixed-income analyst at Portland, Oregon-based Leader Capital Corp., said today in a telephone interview. “It’s cheap financing still so why not do that.” Investors are poised to earn 7.01% on an annualized basis this year on debt from the most creditworthy to the riskiest borrowers worldwide, according to the Bank of America Merrill Lynch Global Corporate and High Yield Index. Those would be the largest gains since a 12.05% return in 2012, the index data show.

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” ..because of how Saudi Arabia uses its oil well to support its entire economy, the country’s budget calls for $90 a barrel to break even, despite that the cost of production is closer to $30.”

Collapse Of Oil Prices Leads World Economy Into Trouble (Guardian)

OPEC, the largest crude-oil cartel in the world, wanted others to feel its pain as oil prices collapsed. “OPEC wanted … to cut off production … and they wanted other non-OPEC [countries], especially in the US and Canada, to feel the pinch they are feeling,” says Abhishek Deshpande, lead oil analyst at Natixis. But in its rush to influence others, OPEC ended up hurting everyone in the process – including itself. Low oil prices, pushed down further by OPEC’s meeting last week,have impacted world economies, energy stocks, and several currencies. From the fate of the Russian rouble to Venezuelan deficits to American mutual funds full of Exxon or Chevron stock, OPEC’s decision was the shot heard round the world for troubled commodities.

So how low could oil go? Standard Chartered analysts expect a “chaotic” quarter ahead, saying OPEC’s decision to keep the production target unchanged is “extremely negative for oil prices for 2015”. The bank slashed its 2015 average price forecast for Brent crude oil by $16 a barrel to $85. Other forecasts are lower. Citi Research estimated an average 2015 price of $72 for WTI and $80 for ICE Brent. Natixis’s Deshpande said their average 2015 Brent forecast is around $74, with WTI around $69. These prices have real-world effects on world economies. Everyone in the sector is smarting. Deshpande said because of how Saudi Arabia uses its oil well to support its entire economy, the country’s budget calls for $90 a barrel to break even, despite that the cost of production is closer to $30.

Other OPEC members have even higher budgetary breakevens. Saudi Arabia is sitting on a “war chest” of money it stockpiled when prices were high, Deshpande said. Citi analysts said Saudi Arabia has about $800bn in cash reserves. Venezuela, on the other hand, is a prime example of a country squandering its riches. Citi said for every $10 drop in oil prices Venezuela loses about $7.5bn in revenues. “Already weak fiscally, this should call for reducing energy subsidies. But domestic politics including the 2015 election makes this nearly impossible,” they said. OPEC countries as a whole could lose $200bn in revenue if Brent prices stay at $80, which is about $600 per capita annually, Citi said.

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“If you’re selling at the wellhead, you’re getting a very low number relative to WTI.”

Sub-$50 Oil Surfaces in North Dakota As Regional Discounts Swell (Bloomberg)

Oil market analysts are debating if oil will fall to $50. In North Dakota, prices are already there. Crude sold at the wellhead in the Bakken shale region in North Dakota fell to $49.69 a barrel on Nov. 28, according to the marketing arm of Plains All American Pipeline LP. That’s down 47% from this year’s peak in June, and 29% less than the $70.15 paid for Brent, the global benchmark. The cheaper price for North Dakota crude underscores how geographic and logistical hurdles can amplify the stress that plunging futures prices have put on drillers in new shale plays that have helped push U.S. oil production to the highest level in 31 years. Other booming areas such as the Niobrara in Colorado and the Permian in Texas have also seen large discounts to Brent and U.S. benchmark West Texas Intermediate.

“You have gathering fees, trucking, terminaling, pipeline and rail fees,” Andy Lipow, president of Lipow Oil Associates LLC in Houston, said Dec. 2. “If you’re selling at the wellhead, you’re getting a very low number relative to WTI.” Discounted prices at the wellhead have been exacerbated by a 39% drop in Brent futures since June 19 to $69.92 a barrel yesterday. Prices have fallen as global demand growth fails to keep pace with surging oil production from the U.S. and Canada. Much of that new output is coming from areas that are facing steep discounts. Bakken crude was posted at $50.44 a barrel Dec. 2. Crude from Colorado’s Niobrara shale was priced at $54.55, according to Plains. Eagle Ford crude cost $63.25, and oil from the Oklahoma panhandle was $58.25.

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Look for more of this too.

First U.S. Gas Station Drops Below $2 a Gallon (Bloomberg)

$2 gasoline is back in the U.S. An Oncue Express station in Oklahoma City was selling the motor fuel for $1.99 a gallon today, becoming the first one to drop below $2 in the U.S. since July 30, 2010, Patrick DeHaan, a senior petroleum analyst at GasBuddy Organization Inc., said by e-mail from Chicago. “We knew when we saw crude oil prices drop last week that we’d break the $2 threshold pretty soon, but we didn’t know if it would happen in South Carolina, Texas, Missouri or Oklahoma,” said DeHaan, senior petroleum analyst for GasBuddy. “Today’s national average, $2.74, now makes the current price we pay a whopping 51 cents per gallon less than what we paid a year ago.”

Gasoline is sliding after OPEC decided last week not to cut production amid a global glut of oil that has already dragged international oil prices down by 37% in the past five months. Pump prices have fallen by almost a dollar since reaching this year’s high on April 26. 15% of the nation’s gas stations are selling fuel below $2.50 a gallon, “and it may not be long before others join OnCue Express in that exclusive club that’s below $2,” said Gregg Laskoski, another senior petroleum analyst with GasBuddy. Retail gasoline averaged $2.746 a gallon in the U.S. yesterday, data compiled by Florida-based motoring club AAA show. Stations will cut prices by another 15 to 20 cents a gallon as they catch up to the plunge in oil, Michael Green, a Washington-based spokesman for AAA, said by e-mail today.

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“In a global market that neighboring Kuwait estimates is facing a daily oversupply of 1.8 million barrels, the accord stands to deepen crude’s 38% plunge since late June .. ”

There Are 550,000 Iraqi Barrels Signaling Oil Glut Will Deepen (Bloomberg)

Not only is OPEC refraining from cutting oil output to stem the five-month plunge in prices, it’s adding to the supply glut. Just five days after OPEC decided to maintain production levels, Iraq, the group’s second-biggest member, inked an export deal with the Kurds that may add about 300,000 barrels a day to world supplies. In a global market that neighboring Kuwait estimates is facing a daily oversupply of 1.8 million barrels, the accord stands to deepen crude’s 38% plunge since late June. Or as Carsten Fritsch, a Frankfurt-based analyst at Commerzbank AG, put it: There’ll be “even more oil flooding the market that nobody needs.”

Benchmark Brent crude slumped immediately after the deal was signed Dec. 2 in Baghdad, dropping 2.8% to $70.54 a barrel. Prices, which slipped 0.9% yesterday to reach the lowest since 2010, were at $70.38 at 1:30 p.m. Singapore time today. Futures are down about 10% since OPEC’s Nov. 27 decision. The agreement seeks to end months of feuding between the Kurds and officials in Iraq over the right to crude proceeds, a dispute that has hindered their joint effort to push back Islamic State militants. The deal allows for as much as 550,000 barrels a day of crude to be shipped by pipeline from northern Iraq to the Mediterranean port of Ceyhan in Turkey, according to the regional government. The Kurds were already exporting about 220,000 barrels daily, according to data compiled by Bloomberg.

The Kurdish Regional Government expanded its control of Iraq’s oil resources in June when it deployed forces to defend Kirkuk, the largest field in the north of the country, from Islamic militants. The Kurds have been shipping crude through Turkey in defiance of the central government, which took legal action to block the sales, leaving some tankers loaded with Kurdish oil stranded at sea. As much as 300,000 barrels a day of Kirkuk blend will be shipped through the Turkish pipeline under the terms of the deal, according to the KRG. Another 250,000 barrels daily of oil produced in the Kurdish region will be exported through the same route, according to the government in Baghdad.

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“.. if the consumer is struggling to go out and spend on goods and services, or if Americans are simply hesitant to ramp up spending, it could be a very un-merry holiday season for retailers. ..”

Crushing The “Lower Gas Price = More Spending” Fiction (Zero Hedge)

With uncertainty lingering and patience wearing thin after five+ years of still lackluster wage growth, consumers are increasing saving for the future, hedging against a continuation of “more of the same.” Thus, for many, extra savings at the pump as a result of lower gas prices are simply being stored away to help supplement spending needs in the future, ramping up savings, not spending. As of September, consumers increased savings from 5.4% to a 5.6% pace, up from a recent low of 4.3% in November of last year. [..]

Against the backdrop of three consecutive months of aggressive energy price reprieve, retail sales have fallen short. With more than a $0.50 drop in the average cost of a gallon of gasoline, anything less than a minimal 0.5% increase in monthly retail sales highlights just how fragile the U.S. economy remains, particularly the consumer sector. While the weakness in October was dominated by a few categories, there was insufficient demand elsewhere to compensate. Consumers continue to spend, but at a modest level with no sign of further momentum in sight with income growth stubbornly limited, and consumers opting to use savings from lower gas prices to offset rising healthcare and utilities costs.

We are, after all, a consumer based economy, and if the consumer is struggling to go out and spend on goods and services, or if Americans are simply hesitant to ramp up spending, it could be a very un-merry holiday season for retailers. From the Fed’s perspective, if consumer spending continues to disappoint, headline activity is likely to significantly underperform monetary policy officials’ optimistic forecast of +2% in 2014 and circa 3% in 2015.

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Expect a lot of this.

Energy Junk-Debt Deals Postponed as Falling Oil Saps Demand (Bloomberg)

Two energy-related companies are postponing financings after a plunge in oil prices made their high-yield, high-risk debt more difficult to sell. New Atlas, a newly formed unit of oil and gas producer Atlas Energy Group, put on hold a $155 million loan it was seeking to refinance debt, according to five people with knowledge of the deal, who asked not be identified because the decision is private. EnTrans International, a manufacturer of equipment used in fracking, delayed selling a $250 million bond, according to three other people with knowledge of that transaction. Investors in bonds of junk-rated energy companies are facing losses of more than $11 billion as oil prices dropped to a five-year-low of $63.72 a barrel this week. This is deepening concern that the riskiest oil explorers won’t be able to meet their obligations, and sending their borrowing costs to the highest since 2010.

More than half of Cleveland, Tennessee-based EnTrans’s revenue comes from equipment sales to the hydraulic fracturing and the energy industry, Moody’s Investors Service said in a Nov. 17 report. The notes, which were being arranged by Credit Suisse, would have been used to refinance debt. Gary Riley, chief executive officer at EnTrans International, said yesterday in an e-mail commenting on the deal status that “the decision to defer or go forward has not been made.” Riley didn’t respond to questions seeking comment today. Deutsche Bank and Citigroup were managing New Atlas’s financing and had scheduled a meeting with lenders for this morning, according to data compiled by Bloomberg.

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Blowing LNG out of the water.

Canada Gas Project Delay Highlights Oil Plunge’s Wider Risk (Bloomberg)

Petroliam Nasional’s decision to postpone its C$36 billion ($32 billion) liquefied natural gas project in Canada highlights the risks for energy developments around the world from oil’s plunge. Woodside Petroleum’s Browse gas project in Australia and an oil project planned by Santos in Indonesia are among others seen as facing delays with oil trading at the lowest in more than four years. “Unless there is compelling reason to move ahead with approvals, we do expect significant deferrals of capex across the board,” Nik Burns, an analyst at UBS AG, said by phone from Melbourne. “Most investors are looking for greater financial discipline with commodity prices falling.” Oil’s slump threatens to hurt LNG contracts tied to crude prices for suppliers already coping with rising costs and competition from Russian gas commitments to China.

Costs at the Canadian project need to be cut before a decision is made, the Malaysian state-owned company known as Petronas said yesterday. Petronas announced the delay less than a week after Chief Executive Officer Shamsul Azhar Abbas told reporters there were a few “loose ends” to sort out before a final investment decision would be made. Oil fell almost 8% in the days between Shamsul’s comments in Kuala Lumpur and yesterday’s announcement. With BG Group saying in November that it would slow its proposed $16 billion LNG project in Prince Rupert, British Columbia, on concern about competing sources of supply from proposed projects in the U.S., the prospects for the 18 LNG developments on the drawing board in Canada are dimming.

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Lower prices are killing jobs in producer nations. Next up: US.

Norway Seeks to Temper Its Oil Addiction After OPEC Price Shock (Bloomberg)

After the biggest slump in oil prices since the start of the global financial crisis, the prime minister of Norway says western Europe’s largest crude producer must become less reliant on its fossil fuels. “We need new industries, a new tax system and a better climate for investment in Norway,” Prime Minister Erna Solberg said yesterday in an interview in Oslo. The comments follow threats from SAFE, one of Norway’s three main oil unions, which warned this week it will respond with industrial action unless the government acts to stem job losses. Solberg said that far from triggering government support, plunging oil prices should be used by the industry as an opportunity to improve competitiveness.

A 39% slump in oil prices since June is killing jobs in Norway, which relies on fossil fuels to generate more than one-fifth of its gross domestic product. In the past few months, Norway has lost about 7,000 oil jobs and SAFE said this week it was up to the government to reverse that trend. Solberg says protecting oil jobs will ultimately make it harder for the economy to wean itself off its commodities reliance. “We need to lower our cost of production in the development of new fields,” she said. “Oil production is not going to rise, it will slowly fall in Norway.”

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I don’t think people understand the size of the China shadow banks, nor the scale of the risk linked to them, or the prominent position they have in the country.

China Shadow Bank Collapse Exposes Grey-Market Lending Risk (FT)

A sign in parchment above the locked door of Shanxi Platinum Assemblage Investment, written in calligraphy, reads “Honesty is fundamental”. Until recently a police notice below it directed investors to report to the local station to submit evidence against the company. In Taiyuan, capital of the central Chinese province of Shanxi, investors have rushed to branches of Platinum Assemblage in recent days as word spread that the company was unable to meet payouts on maturing investment products that had offered annual interest rates of 14-18%. Meanwhile, rumors swirled that executives had fled and branches in some cities had shut their doors. The incident highlights financial risks lurking in the outer margins of China’s shadow banking system, where high-yielding wealth management products blur into grey-market lending. A financial system in which the government refuses to tolerate defaults has also encouraged moral hazard among investors by creating an expectation that even risky credit carries an implicit guarantee.

“I have no idea where they put the money. I’m not really clear on the guarantee businesses. But they had a business licence on the wall,” said an elderly man surnamed Wang wearing a mechanic’s jacket and knit cap outside the company’s locked doors. State media estimates that more than Rmb100 million ($16 million) may be at risk in the collapse of Platinum Assemblage, a relatively tiny sum. But a series of similar incidents this year suggests China’s slowing economy has created fertile ground for hucksters, as companies become increasingly desperate for funds amid a pullback in lending from banks as well as more mainstream non-bank lenders such as trust companies. In March, depositors in Yancheng city, Jiangsu province, rushed to withdraw funds from rural co-operatives and were told that the institutions — which operate like banks but whose legal status exempt them from liquidity regulations – had lent out all the money. Analysts said many co-ops, which were created to lend to farmers, had in fact been investing in real estate.

It is not known how Platinum Assemblage invested clients’ funds, but a large share of shadow banking funding flows into real estate, one of the few industries that, until recently at least, could deliver rates of return high enough to service loans at interest rates often exceeding 20%. Local media reported that wealth management clients of another guarantee company, Henan Swiftly Soaring Investment, blocked a road in Xinxiang city, Henan province, on Sunday to protest against the lack of payout on similarly structured wealth management products. China Business News, a national newspaper, reported that much of that money was also used for property purchases. Late last year eight government agencies including the banking regulator, the central bank and the commerce ministry released a notice warning of rampant irregularities among non-financial guarantee companies.

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More funds that don’t deliver.

BlackRock China ETF’s Derivatives Strategy Faltering (Bloomberg)

BlackRock’s pioneering China exchange-traded fund is at risk of losing its market-leading status as returns trail its benchmark index and competitors take advantage of reduced government curbs on foreign investors. The $10.1 billion iShares FTSE A50 China Index ETF, the first to track mainland shares when they were inaccessible to most foreigners in 2004, has underperformed its target by 4.6 percentage points this year. The Hong Kong-listed fund is lagging behind as its decade-long strategy of using derivatives proves more expensive for investors than buying shares directly. The fund’s diminished appeal reflects how China’s efforts to remove barriers on its $4.6 trillion stock market are changing the way international investors gain exposure to the world’s second-largest economy. Derivative products are getting replaced by funds that access the Chinese market through the nation’s quota system for foreign institutions and the Shanghai-Hong Kong exchange link that started last month.

“The playing field is changing,” Brendan Ahern, managing director at Krane Fund Advisors in New York, which oversees four Chinese ETFs, said by phone. “The market is gravitating to direct products. Managers have to think about how to adapt to the changes.” Investors are weighing the most efficient ways to access China’s stock market as it rallies from the cheapest levels on record versus global peers. The Shanghai Composite Index has advanced 31% in 2014 and reached a three-year high yesterday amid speculation the nation’s central bank will increase monetary stimulus. The BlackRock fund’s net asset value has climbed 26% this year, versus a 30% gain in the gauge it’s designed to mimic. Shareholder returns have been just 18%, reflecting both the cost of using derivatives and investors’ unwillingness to keep valuing the ETF at a premium to its underlying securities.

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Draghi won’t move.

What The Dollar May Be Saying About Europe (CNBC)

The dollar has been riding high and is looking for another boost Thursday from a dovish European Central Bank. The greenback made new multiyear highs against the yen and euro Wednesday, ahead of the ECB meeting. The dollar has been rising as U.S. monetary policy diverges from that of Japan and the eurozone. The U.S. economy is also stronger, and that is expected to show up in another 200,000 plus jobs report Friday. While the ECB is not expected to take any new steps at its rate meeting Thursday, traders have been anticipating a dovish ECB President Mario Draghi, who holds a briefing after the meeting. “The gist of it is I think Draghi will leave the door wide open for sovereign QE in the first quarter,” said Alan Ruskin, head of G-10 foreign exchange strategy at Deutsche Bank. “I think you’ve heard a number of comments from ECB officials suggesting December is too early, and they want to let some of their past decisions work their way through.”

The ECB has embarked on asset purchases as the Fed ended its quantitative easing bond buying, or QE, in October. The ECB is now expected to expand its asset buying with a program to buy sovereign debt. The dollar index, at 89.005 was at the highest level since March, 2009 and the dollar was at a seven-year high against the yen. “There’s this kind of fear that the dollar’s traded very, very well going into this meeting, and that maybe there’s some expectation he will deliver more than he actually will,” said Ruskin. He said even though Draghi is expected to be dovish, if nothing more is announced there’s a chance the dollar could selloff.

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” .. could require cuts in non-protected departments such as police, local government and justice ..”

UK Moves To Cut Spending To 1930s Levels (Guardian)

The chancellor, George Osborne, set out dramatic plans to move Britain from the red into the black that will see public spending as a percentage of GDP fall to its lowest level since the 1930s and could require cuts in non-protected departments such as police, local government and justice amounting to a further £60bn by 2019-20. The plans, according to the Treasury spending watchdog, the Office for Budget Responsibility, also presume the loss of a further one million public sector jobs by 2020, a renewed public sector pay squeeze and a further freeze on tax credits. The scale of the implied spending cuts required to drive the country into a surplus of £23bn by 2019-20 in part prompted the Liberal Democrat business secretary, Vince Cable, to write two weeks ago to ask the OBR to distinguish in its forecasts between the spending plans agreed by the coalition up to 2015-16 and any spending projections after that date which could only be an assumption about tax and spending policy.

Cable described the Osborne plans to bring public spending down to 35 % of GDP as “wholly unrealistic”. Among the measures in a politically-dominated autumn statement was a surprise shakeup of stamp duty, with an increase in rates levied on the most expensive properties designed to trump Labour’s plans for a mansion tax six months before the general election. Osborne claimed 98% of home-buyers would pay less stamp duty as a result of the changes, which, from midnight on Wednesday night, axed the big jumps in tax currently triggered when the cost of a home moves into a higher band. Under the new system, based on income tax bands, home buyers will pay no stamp duty on the first £125,000 of a purchase, then 2% up to £250,000, 5% up to £925,000, 10% up to £1.5m and 12% on everything above £1.5m. Anyone buying an “averagely priced” home worth £275,000 would pay £4,500 less in tax.

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“Real growth is weak; nominal growth is pathetic .. ”

Australia’s Dreadful GDP Figures – Six Things You Need To Know (Guardian)

Well, what a dreadful set of numbers. The September quarter GDP figures released on Wednesday unfortunately confirmed other economic data that shows Australia’s economy is growing at barely walking pace. Let’s break down the figures and to see if there is any sunshine amid the gloom.

1. Real growth is weak; nominal growth is pathetic – In seasonally adjusted terms, the economy grew by just 0.3% in the September quarter, and by 2.7% in the past year. Given average annual growth is around 3.1%, the 0.3% growth is particularly dreadful given that it would annualise to just 1.2%. As you would expect, the news was even more depressing for GDP per capita growth. In trend terms, it didn’t grow at all in the September quarter and, in seasonally adjusted terms, it actually fell 0.13%. Thus any growth we achieved this last quarter came about through population increase. For the budget numbers, the focus always goes onto nominal growth. Measured in current dollars, it gives a better link to taxation revenue than real GDP.

The May budget forecast nominal GDP in 2014-15 to grow by 3%. In the past 12 months it has grown by 2.7%, but most of that growth came in the December 2013 quarter and thus will not be counted from the next quarter onwards. Nominal GDP in the past quarter grew by just 0.2% in trend terms and actually fell by 0.1% in seasonally adjusted terms. All in all this suggests a fairly big hit to the budget bottom line. So yeah, all gloom.

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I’d say that’s putting it mildly.

Putin Accuses West Of ‘Pure Cynicism’ Over Ukraine (CNBC)

Russian President Vladimir Putin accused Western powers of “pure cynicism” over the situation in Ukraine, in a key speech to his country as its economic prospects worsens. The ruble looked set for another record low against the dollar as his speech unfolded on Thursday. With a plummeting ruble and oil price, spiraling inflation, and the prospect of more stringent sanctions from Western powers, Russia’s short-term economic prospects are falling faster than the temperature during a Siberian winter. Putin previously served as Russia’s Prime Minister, and this term coincided with relative economic prosperity for the country, as rising oil and gas prices helped boost Russia’s biggest exports. In 2015, however, the average Russian household’s disposable income will shrink by 2.8%, according to official Russian figures – the first fall since Putin came to power.

As President, his recent focus on defence and nationalism seems to have boosted his approval ratings, but it’s far from clear that this can continue if all Russians – from street-cleaners to oligarchs – feel worse off. “The market will be looking for the new ideas which are going to pull Russia out of the economic stagnation and looming decline which was already evident prior to the crisis in Ukraine and the more recent drop in oil prices,” Timothy Ash, head of emerging markets research at Standard Bank, wrote in a research note. “The pressure is now on Putin to offer a rival vision for a successful economic model for Russia.”

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But who’s going to listen? Think these fold care about a million signatures? Once signed, we won’t get rid of these Frankensteins anymore.

One Million Europeans Sign Petition Against EU-US TTIP Talks (BBC)

A campaign group website says over a million people in the European Union have signed a petition against trade negotiations with the United States. The petition calls on the EU and its member states to stop the talks on the Transatlantic Trade and Investment Partnership or TTIP. It also says they should not ratify a similar deal that has already been done between the EU and Canada. It says some aspects pose a threat to democracy and the rule of law. One of the concerns mentioned in the petition is the idea of tribunals that foreign investors would be able to use in some circumstances to sue governments.

There is a great deal of controversy over exactly what this system, known as Investor State Dispute Settlement, would enable companies to do, but campaigners see it as an opportunity for international business to get compensation for government policy changes that adversely affect them. This kind of provision exists in many bilateral trade and investment agreements. Friends of the Earth have published new research on the impact they have had on EU countries. Information about these cases is not always made public, but the group says that going back to 1994, foreign investors have sought compensation of almost €30bn (£24bn) from 20 states. Where the results are known (a small minority of the total), the tribunals have awarded total compensation of €3.5bn (about £2.8bn).

In Britain, the possible implications of this provision for the National Health Service have been especially controversial. Campaigners believe that the investor tribunals would make it harder to reverse any decisions to contract services out to international healthcare firms. John Hilary of War on Want said: TTIP “will make it impossible for any future government to repeal the Health & Social Care Act and bring the NHS back into public hands”. The petition lists a number of other areas where its signatories believes European standards would suffer if the TTIP negotiations are completed and the Canada deal is ratified: employment, social, environmental, privacy and consumer protection.

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Feels like Mao never left.

Xi’s Cultural Revolution Is Doomed to Fail (Bloomberg)

As Japan and South Korea have shown, the best way for governments to encourage pop culture with global appeal is probably to stay out of the way. China’s President Xi Jinping disagrees. Take Monday’s announcement by China’s top media watchdog. Effective immediately, the government has reserved the right to send film and television actors, directors, writers and producers on all-expenses-paid, involuntary, 30-day sabbaticals to rural mining sites, border areas, and other remote locations. The purpose, according to the directive, is to help Chinese artists “form a correct view of art and create more masterpieces.” The measure is extreme – reminiscent of “sending down” students to the countryside for reeducation during China’s mad Cultural Revolution. But it’s by no means an isolated case. Over the last few months, Xi’s government has issued several directives designed to control the country’s entertainment industries.

They include new restrictions on the streaming of foreign programs, bans on specific types of plots (adulterous affairs, for example, can no longer be portrayed in dramas), shutdowns of independent sites that subtitle foreign programs for Chinese viewers, and even a prohibition on punning. These directives sit awkwardly with Xi’s very public ambition to expand China’s “soft power” – a term that embodies everything from movies to bugle-playing – beyond its borders. The Chinese president is a child of Communist royalty; his formative years were during the Cultural Revolution, when entertainment was viewed as an ideological pursuit whose role was to propagandize. In Xi’s worldview, artists who don’t produce “correct” movies are doing a disservice to the nation and need to be reminded of their duty — say, by spending more time with the hardworking peasants they’re supposed to be championing in their works.

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Farrell again looks beyond the narrow world of investors.

The 8th, And Final, Deadly Sin: Exploiting The Earth (Paul B. Farrell)

“When I look at America,” said Pope Francis during a recent address at a university in Southern Italy, also looking at his “own homeland in South America, so many forests, all cut, have become land … can no longer give life.” “This is our sin, exploiting the Earth and not allowing her to her give us what she has within her. This is one of the greatest challenges of our time: to convert ourselves to a type of development that knows how to respect creation,” the pope told an audience of “students, struggling farmers and laid-off workers.” Challenge? Much worse. The relentless “destruction of nature is a modern sin.” says Pope Francis. Destruction of the planet’s great rain forests is the new sin of today’s humans.

Capitalism has already converted half the world’s original rain forests and natural habitats into urban developments. Another quarter will be rapidly converted by 2050. But for Pope Francis, the real sin is consumerism. In a recent ThinkProgress summary of Pope Francis’s annual letter to the G-20 leaders meeting in Australia, Katie Valentine put it this way: “Pope Francis to World Leaders: Consumerism Represents a ‘Constant Assault’ on the Environment.” The pope relied on several studies, including a Worldwatch report commented on in National Geographic by Gary Gardner: “Most of the environmental issues we see today can be linked to consumption,” warning us that for “humanity to thrive long into the future we’ll need to transform our cultures intentionally and proactively away from consumerism towards sustainability.”

Failure to do so means that “unbridled consumerism will have serious consequences for the world economy.” Pope Francis has called consumerism a “poison.” Earlier this year he warned that “Christians should safeguard Creation,” for if humanity destroys the planet, humans themselves will ultimately be destroyed. He added” ‘Creation is not a property, which we can rule over at will; or, even less, is the property of only a few” capitalists. “Creation is a gift, a wonderful gift that God has given us, so that we care for it and we use it for the benefit of all, with great respect and gratitude.” For exploiting the Earth by destroying forests, especially Amazonian rain forests, is a sin.”

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